Why do price ceilings tend to cause persistent imbalances in the market?
A. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
B. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
C. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
D. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Answer: A
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The purpose of having the members of the Board of Governors of the Federal Reserve serve fourteen-year terms is to
A) establish long-standing ties with high-level officials of other nations' central banks. B) ensure that the governors become well-experienced at policymaking. C) promote unity of opinion from shared time together. D) insulate the governors' policy decisions from the influence of presidential elections and politics.
Current estimates of the marginal propensity to consume out of wealth are in the neighborhood of ________
A) three and one-half cents per dollar of wealth B) 45 cents per dollar of wealth C) 98 cents per dollar of wealth D) $4.87 per dollar of wealth
Externalities arise when: a. the benefits of a transaction between producers and consumers are enjoyed by only the consumers. b. the benefits of a transaction between producers and consumers are enjoyed by only the producers. c. a transaction negatively impacts people who are not directly involved in the transaction
d. a transaction occurs without the government's approval.